Homelessness is growing in Southern California, where housing costs are outpacing income. “In Orange County, there is only a 2 percent vacancy rate right now in rentals, which makes anybody who’s had any type of poor credit or eviction or any types of credit challenges like bankruptcy really locked out of the rental market,” said Donna Gallup, president and CEO of Orange County-based American Family Housing, in an interview with Inside Philanthropy.“We are seeing a lot of people staying in their cars, people living in RVs, people who just can’t get access to an affordable apartment. The last statistic I saw in Orange County was that rent was up 7 percent and the average apartment is $1,848.”

Most landlords want to see their tenants earn 40 times their annual rent to qualify for housing. At that level of rent, Orange County renters would need an average annual income of $73,920, yet one in five Orange County households makes less than $25,000 annually, which helps explain why there are over 15,000 homeless people in Orange County.

Enter American Family Housing (AFH), founded 30 years ago by Jim Miller, committed to ending the cycle of homelessness by helping low-income families become self-sustaining. CEO Donna Gallup has been with the charity for about a year, having worked previously as the CEO of the LAMP Community on skid row in Los Angeles, where she had bought a loft to confront the homeless problem head on.

AFH has an interesting revenue model. First and foremost, it has rentals that generate an income stream. “American family housing is mostly self-supporting," Gallup said. "Sixty-five percent of our revenue comes from funds generated by our 53 properties in three counties [Orange, Los Angeles, and San Bernardino]. The majority of those properties do not have any type of commercial debt. Even though we keep the property rents affordable for the tenants at all those sites, we still generate income that goes to support the operation and services of the organization."

Still, more than a third of the charity’s $4.5 million annual budget comes from elsewhere. "The reality is that diversity of funding is the key to being successful for the long-term,” Gallup said. “We have a balance between private enterprise, foundations, and individual donors. We have big support in this organization from the faith community, so we get regular checks from churches because the organization was founded on faith.”

Homelessness can be a tough issue to raise money for, because the cause can strike many people as hopeless. Initiatives have come and gone for decades, and yet homelessness is as bad as ever—or worse.

Yet solutions do exist, and AFH has had substantial success getting people housed. Gallup believes that people becoming acquainted with the formerly homeless and those who have turned their lives around through AFH is an essential aspect of her fundraising, “I have a group of individuals that I’ve been meeting with since February in my organization. They are all clients. They’ve all been homeless. Many of them have disabilities. They meet with me every single month, and my quality council. They have become ambassadors for the organization. They come to events. They call foundations and donors to thank them, so that donors touch and feel someone who has been in that situation.”

AFH's efforts to showcase the concrete results that come from its work line up with the growing desire among many donors to know what their donations are accomplishing. Inside Philanthropy just wrote yesterday on this topic, reporting on a new survey that shows how many nonprofits are scrambling to find new and better ways to document their impact as donor expectations rise.

The organization will soon begin a capital campaign to raise money for an innovative project that will provide micro-housing units for chronically homeless people. Micro-units are small living spaces, often tiny houses, that can be built at a low cost to provide basic shelter, along with privacy and security. The concept is generating a lot of excitement in different places (along with some controversy).

AFH has a property where it aims to build build 16 micro-units, one for the property manager and 15 units for the homeless. Eight of them will be for chronically homeless veterans.

Gallup says about this project, "The most interesting part of it is we’re trying to be a model that can be replicated. It’s an innovative approach to development, because the structures are manufactured off-site while the site work is being done. Then they are delivered to the site and are put together to create housing, so the process shortens the time it would normally take to build a project.” The units are designed to be “very strong, very sustainable and very energy efficient.”

It will be interesting to see how donors respond to requests to give for micro-units. Innovation is often appealing to funders, who like investing in something that is new and could offer a big step forward. If micro-units really are a scalable idea that can change the economics of housing the homeless, they could attract a lot of excitement from donors.

Pulling the lens back further on AFH's work, Gallup thinks it's crucial for her and the organization to be visible and constantly communicating. Just as crucial is meeting people where they are. “You have to have as many opportunities as possible for the community to be able to participate at whatever level they are comfortable with financially and emotionally, whatever their interests are,” Gallup said. "Sometimes it’s volunteering and sometimes that’s writing a check because that’s what makes you feel good, and that’s all you want to do. Other times it’s knowing that you want to participate in a specific act like raising money for the capital campaign, or if you want to do a food drive or participate in our Thanksgiving dinner."

Gallup offers this advice to fellow workers in the nonprofit sector: “To help the community, go where your passion is. Don’t let your fear get in the way addressing of issues or helping to solve a problem.”